Amazon.com Inc (NASDAQ:AMZN) Risk Hits An Inflection PointDate Published: 2018-04-12
No Risk Alert Here: Before we dive into any analysis we simply note that Amazon.com Inc (NASDAQ:AMZN) risk is neither elevated nor depressed. We'll detail it below -- but that's the lede -- the option market is in a holding period with an IV30 of 42.78% versus the IV30 of the S&P 500 at 17.71%. You might say that the post it note for Amazon.com Inc would read, "holding pattern." The annual high for Amazon.com Inc IV30 is 51.67%.
To skip ahead and see if buying or selling options has been a winner in Amazon.com Inc, you can go here: Getting serious about option trading.
This is a proprietary risk rating and risk alert system that looks forward for the next month -- or really 30 days to be exact -- and that includes weekends. The system is based on multiple interactions of data points, many of which come directly from the option market for Amazon.com Inc (NASDAQ:AMZN) . The creator of this model is Capital Market Laboratories (CMLviz.com).
In the "Why This Matters" section at the end of this article on Amazon.com Inc we're going to take a step back and show in great specificity that there is actually a lot less "luck" in successful option trading than many people know. The whole concept of an "option trading expert" is vastly over complicated and we'll talk about how superior returns are earned.
But first, let's turn back to AMZN and the company's risk rating:
We also take a peek at the implied vol for the Technology ETF (XLK), our broad based proxy for AMZN.
|S&P 500 IV30||17.71%|
|Nasdaq 100 IV30||23.14%|
|AMZN HV 30||35.41%|
|AMZN Current IV30||42.78%|
|52 Week Low IV30||16.05%|
|52 Week High IV30||51.67%|
The implied price swing risk as reflected by the option market has hit an inflection point relative to the company's past. The option market reflects a 95% confidence interval stock price range of ($1,287.50, $1,566.60) within the next 30 calendar days.
AMZN OPTION MARKET IMPLIED PRICE SWING RISK
The IV30® is the implied price swing risk reflected by the option market in the stock price for the next 30 calendar days -- it's forward looking. Amazon.com Inc shows an IV30 of 42.8%, which is an inflection point for the company relative to its past.
The option market for AMZN has shown an IV30 annual low of 16.1% and an annual high of 51.7%, meaning that AMZN is at the 75% percentile right now. Here's a table of the data before we dig into the implied price swing risk rating further.
The implied stock swing risk from the option market reflects a wider range in the next 30 calendar days for Amazon.com Inc (NASDAQ:AMZN) than it has on on average.
We have a situation now where not only is the IV30 elevated relative to the past, but the option market reflects the likelihood of yet more stock movement in the next 30-days than it has in the last 30-days. Let's turn to a chart to see what's going on.
Amazon.com Inc Risk Rating
The AMZN risk rating is at 3, where the rating goes from one (the lowest risk) to five (the highest risk). The driving factors for the 3 rating are:
↪ The IV30 is above the annual average.
↪ The IV30 is above 40%.
↪ The HV30 is above the 80th percentile.
↪ The IV30 is above the HV30.
↪ The stock has moved +9.3% over the last 3-months which does indicate some elevated risk.